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Thread: Don't Fear Change by the Introduction of New Technology

  1. #1
    Administrator Kelly Bramble's Avatar
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    Don't Fear Change by the Introduction of New Technology

    The “lump of labor” fallacy is the assumption that there is a fixed amount of work, which determines the number of jobs in an economy. The new Page One Economics issue explains why this isn’t true and where jobs come from:

    Examining the “Lump of Labor” Fallacy Using a Simple Economic Model

    https://research.stlouisfed.org/publications/page1-econ/2020/11/02/examining-the-lump-of-labor-fallacy-using-a-simple-economic-model
    Tell me and I forget. Teach me and I remember. Involve me and I learn.

  2. #2
    Administrator Kelly Bramble's Avatar
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    And an important quote:


    "Over the long run, technological advance creates new goods and services, raises national income, and increases the demand for labor throughout the economy. However, it is important to note that these changes can create winners and losers—some workers will lack the skills to transition to new jobs. Recent technological advance has increased the demand for highly skilled workers, whose labor is a complement to the new technology, but the new technology has replaced the labor of some less-skilled workers. Therefore, it's important that workers invest in their human capital and continue to improve their skills throughout their working years. "
    Tell me and I forget. Teach me and I remember. Involve me and I learn.

  3. #3
    Technical Fellow jboggs's Avatar
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    Our city hosts an annual high school competitive robotics competition as part of a worldwide program. As a long-time adult team mentor and chair of a local support group, I have been a frequent source for the local media in promoting the event. A couple years ago I was a guest on a local radio program along with one of the team coaches. The host welcomed us warmly and opened with this question - "I have always heard that robots are taking our jobs away. What is your comment about that?"

    Unfortunately, for much of the general public her understanding is an assumed "fact", even for those whose job comes from one the the many technological wonders of our world. Sad but true. And don't expect it to get better anytime soon, even with all the emphasis on STEM education. Its just another way that so many of us just live our lives without any real understanding of the world around us. Fish in the sea don't know they live in water.

    To get back to her question, I referred to the computer on her desk and reminded her that when desktop computers first came out bookkeepers and accountants thought they'd be out of work. I asked, "Do you think that has been the case?". Then I asked about her phone, on which she could immediately talk to anyone around the world, or even see them, or check the weather anywhere, or ask any question normally found in an encyclopedia. I said, "It's obvious that phone put a lot of people out of work. A lot! But do you think it created more jobs than it eliminated?"

    I explained that technology doesn't destroy jobs, it changes them. It makes work more efficient, and actually creates more jobs in the long run. It does require us to learn more skills, but when is that a bad thing?

  4. #4
    Principle Engineer Cragyon's Avatar
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    Agree and agree.

    "The Short Run and Long Run" overview discusses lost jobs but fails to address the individual challenges that comes with that.


    There are so many of us that are not willing to do the hard work of an education much less step up and take responsibility for our own career and financial security. I have witnessed those that seem to expect that they can stumble into adulthood and get a middle class job because - they showed up. I'm not sure what the cultural changes needed are to change this mind set but this is a hurdle we must think about.

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